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Responsibility of the External Annual Audit

Responsibility of the External Annual Audit. Board of External Auditors Ernst & Young, LLC Audits the following funds and issues 6 audit opinions: Regular, Specific, ICR, FEMCIDI Medical Benefits Leo S. Rowe Pan-American Rowe Memorial Inter-American Defense Board Trust for the Americas

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Responsibility of the External Annual Audit

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  1. Responsibility of the External Annual Audit • Board of External Auditors • Ernst & Young, LLC • Audits the following funds and issues 6 audit opinions: • Regular, Specific, ICR, FEMCIDI • Medical Benefits • Leo S. Rowe Pan-American • Rowe Memorial • Inter-American Defense Board • Trust for the Americas • Additionally and separately audits: • OMB-A-133 (Trust for the Americas) • Retirement and Pension Fund

  2. Background of External Annual Audit • New bid for contracting de Ernst & Young, LLC approved by the Board of External Auditors • Contract to audit 3 accounting years: 2013, 2014 y 2015 • Ernst & Young, LLC provided detailed cost by fund for each opinion it issues

  3. External Annual Audit Cost by Fund • Audit cost from Ernst & Young, LLC by Fund and year

  4. Cost Structure from Ernst & Young, LLC • “The level of effort in an audit is not necessarily based in the size of the fund. Small funds simply have a lower level of materiality.” EY, LLC • Other variables: • Number of transactions • Complexity of transactions • Uncertainty of transactions (like allowance for uncollectible loans) • Systems and subsystems used • Level of segregation of duties • Internal control structure and efficiency

  5. Sequence of events • Up to year 2012, the total audit costs were charged to the Regular Fund • The budget of the Regular Fund has continued to decrease in nominal terms and in particular, the subprogram of the Board of External Auditors • The GS continuously tries to identify and allocate costs where they are incurred • In the year 2013, each Committee responsible for each Fund was informed that the audit cost for that fund would have to be covered by each fund • The cost would be allocated for the next 3 years in accordance with the signed agreement with Ernst & Young, LLC

  6. Things to Consider • Possibility that the Regular Fund cover the audit cost of the Rowe Fund • The budget of the Board of External Auditors in the Regular Fund continues to decrease • If the budget of the Board of External Auditors Subprogram increases, the budget of the Subprogram to decrease must be identified • Possibility that the Rowe Fund contract its own audit • Contract signed with Ernst & Young, LLC is for 3 years and it cannot be modified unilaterally • Having various audit teams would be detrimental (duplicative and more expensive)

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